Woolworths fined more than $1.2 million for underpaying staff

Woolworths Hit with $1.2 Million Fine for Failing to Pay Workers’ Leave Entitlements

In a significant ruling, Woolworths has been fined $1.2 million by a Melbourne court after the supermarket behemoth admitted to not paying over $1 million in leave entitlements to approximately 1,200 former employees in Victoria. The penalty comes after the company self-reported discrepancies in its payroll system, which failed to compensate workers for their long service leave.

Though the retail giant faced a potential maximum fine of more than $10 billion, Magistrate Nahrain Warda deemed a $1.2 million fine as an appropriate sanction during the Friday sentencing. The underpayments, which affected 1,227 ex-staff members, stemmed from 3,617 instances of miscalculated leave payouts spanning from January 2020 to July 2022.

Woolworths’ admission of guilt on April 18 in Melbourne Magistrates Court followed charges laid by the Wage Inspectorate Victoria for failing to meet long service leave obligations. The company’s legal representative, Saul Holt KC, highlighted Woolworths’ proactive approach in identifying and reporting the payroll errors, labeling the corporation as a “model accused.”

Magistrate Warda underscored the significance of long service leave to employees and emphasized the corporate responsibility to ensure accurate payment. She pointed out the gravity of the situation, noting the extensive duration of the violations and the substantial amount owed. However, Warda also recognized Woolworths’ efforts to rectify the issue through self-reporting, cooperation with the investigation, and immediate steps taken to compensate and support the affected former employees. Consequently, Woolworths was fined $1,277,000 without conviction, while its subsidiary, Woolstar, faced a $36,000 penalty.

Wage Inspectorate Victoria Commissioner Robert Hortle responded to the sentence as a stark warning to other large corporations about their obligations. He stressed the expectation for businesses to manage their payroll correctly, especially for long-serving staff loyal to the company.

In addition to the fine, Woolworths is required to cover the regulator’s legal expenses, amounting to $15,000. This case serves as a reminder of the importance of diligent payroll management and the consequences of failing to fulfill workers’ entitlements.